All-payer rate setting is a price setting mechanism in which all third parties pay the same price for services at a given hospital. It can be used to increase the

market power In economics, market power refers to the ability of a theory of the firm, firm to influence the price at which it sells a product or service by manipulating either the supply or demand of the product or service to increase economic profit. In othe ...

of payers (such as private and/or public insurance companies) versus providers, such as hospital systems, in order to control costs. All-payer characteristics are found in most developed economies with multi-payer healthcare systems, including

France France, officially the French Republic, is a country located primarily in Western Europe. Overseas France, Its overseas regions and territories include French Guiana in South America, Saint Pierre and Miquelon in the Atlantic Ocean#North Atlan ...

Germany Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...

Japan Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...

, and the

Netherlands , Terminology of the Low Countries, informally Holland, is a country in Northwestern Europe, with Caribbean Netherlands, overseas territories in the Caribbean. It is the largest of the four constituent countries of the Kingdom of the Nether ...

. The U.S. state of

Maryland Maryland ( ) is a U.S. state, state in the Mid-Atlantic (United States), Mid-Atlantic region of the United States. It borders the states of Virginia to its south, West Virginia to its west, Pennsylvania to its north, and Delaware to its east ...

also uses such a model. The All-payer rate setting have been proposed in the United States as a healthcare reform measure. The proposal for a public option (a voluntary, publicly sponsored insurance plan similar to Medicare) has been cited as indirectly sharing some of the same goals as all-payer rate-setting systems.

Maryland

Since the late 1970s, Maryland has operated an all-payer system for hospital services. An independent commission establishes the rate structure for each hospital. That eliminated hospital cost shifting across payers, and spread more equitably the costs of uncompensated care and medical education and limited cost growth, but

per capita ''Per capita'' is a Latin phrase literally meaning "by heads" or "for each head", and idiomatically used to mean "per person". Social statistics The term is used in a wide variety of social science, social sciences and statistical research conte ...

Medicare hospital costs are among the country's highest. Medicare's participation in the system is authorized by the Social Security Act, is tied to a growth limit in payment per admission, and entitles the state's hospitals to $2 billion per year in additional revenues from the federal government. The Medicare waiver created incentives to increase the volume of services. Medicare pays higher rates for hospital services in Maryland than it does under the national prospective payment systems. On January 10, 2014, the

Centers for Medicare and Medicaid Services The Centers for Medicare & Medicaid Services (CMS) is a federal agency within the United States Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer ...

(CMS) and the State announced a new model that will focus on overall per capita expenditures for hospital services, as well as on improvements in the quality of care and population health outcomes. For 5 years beginning in 2014, Maryland will limit the growth of per capita hospital costs to the lesser of 3.58% or 0.5% less than the actual national growth rate for 2015 through 2018. The change is forecast to save Medicare at least $330 million. 3.58% is Maryland's historical 10-year growth rate of per capita gross state product.

New York

By 1970, the

New York State Department of Health The New York State Department of Health is the department of the Government of New York (state), New York state government responsible for public health. Its regulations are compiled in title 10 of the ''New York Codes, Rules and Regulations''. ...

began to regulate health insurance reimbursement rates, in 1983 began all-payer rate setting, and by 1986-1988 had moved to a case-based system. In 1996 these were replaced by the current Health Care Reform Act (HCRA), allowing negotiated reimbursement rates and establishing tax funding for public goods like graduate medical education, charity care, and public health.

References

{{reflist Health economics Health care reform

Maryland

New York

See also

References